Unsold Capacity Knocks Avanti for a $2.9 Million Loss

PARIS — Satellite fleet operator Avanti Communications of London on Nov. 12 said its fleet-utilization rate is trending upwards — although still low by industry standards — and that average pricing is holding firm in its core European, African and Middle Eastern markets.

Avanti reported revenue of $13.7 million for the three months ending Sept. 30, about the same as the same period a year ago, when Avanti reported what it said was an exceptional amount of equipment sales and government bandwidth leases.

EBITDA, or earnings before interest, taxes, deprecation and amortization, was negative $2.9 million, the company said in a note to investors.

Avanti operates three satellites and has one full satellite and a large payload on a second satellite scheduled for launch in the next two years. The company’s current satellites have been just 20-25 percent full recently, and remained in that range for the period ending Sept. 30.

But the company said in a statement that fill rates had moved to above 25 percent by the end of the period with no material drop in prices. The company previously had said its capacity was priced at about $2,000 per megahertz per month.

In addition to the two payloads on order, Avanti in September leased a steerable Ka-band beam on Luxembourg-based SES’s Astra 5B satellite, which Avanti is marketing as Hylas-2B.

The company said it has performed an assessment of the beam’s likely market and will bring it into commercial service in the first half of 2016.

Avanti concluded the beam-lease agreement with SES as part of a resolution of a broader dispute with the larger competitor over Ka-band interference around 31 degrees east. The Astra-5B/Hylas-2B satellite is operating from 31.5 degrees east, and Avanti’s Hylas-3 Ka-band payload is to operate from 31 degrees east.

Hylas-3 will be launched aboard a satellite known elsewhere in Europe as EDRS-C, with a laser communications payload to relay data from low-orbiting Earth observation satellites to users. EDRS-C is now more than a year late and is scheduled for launch in early 2017. The Avanti payload will total about 3 gigahertz, the company said.

Avanti’s Hylas-4 satellite, entirely owned by the company, is under construction at Orbital ATK of Dulles, Virginia, and scheduled for launch in the first half of 2017. It carries 28 gigahertz of capacity.

Avanti did not detail per-satellite fill rates. The company had told investors that the Hylas 1 satellite at 33.5 degrees west, launched in November 2010, would be fully booked by 2014, forcing the company to purchase additional capacity.

The company’s backlog stood at $379.7 million at Sept. 30, slightly down from the $389.5 million announced in August. Avanti has said backlog is not a reliable business metric since its framework contracts with governments often start at low amounts and then rise over time.